FRONT PAGE Donald’s blundering ways
- Monday, 30 April 2018
In March, Donald Trump, true to one of his solemn electoral promises, decided to impose 25% tariﬀs on steel imports and a 10% levy on aluminium ones as a way of protecting the US metal processing industry, claiming that these imports threatened national security. Steel and aluminium are used in arms manufacturing and being dependent on a foreign country – this the reasoning put forward by the US administration – would make it impossible for the country to defend itself in the event of an armed conﬂict. In order to introduce the tariﬀs, the US president revived a 1962 law from the height of the Cold War. However, Trump has said that America’s “true friends” will be spared these tariﬀ hikes.
But who are they? Those, for example, which meet their minimum expected share of the NATO military budget, set at 2% of GDP. As it happens neither Italy nor Germany are compliant. Other US-allied countries will have to show that their steel and aluminium exports do not represent a threat to American security. If they succeed, they may be granted a waiver.
According to a number of analysts, Canada, the European Union, South Korea and Mexico are the countries that will feel the brunt of these tariﬀs, which will cause US imports to drop by 14 billion dollars. Canada would lose $3.2 billion, the European Union $2.6 billion but China only $700 million, though the tariﬀs are clearly mainly aimed at Beijing to try and reduce its trade deﬁcit which has now reached $375 billion (according to the Chinese, it’s not above $275 billion).
So, just a few days ago, Trump went again and raised the level of the trade clash with China, announcing the possibility of imposing tariﬀs on Beijing’s imports to the tune of $100 billion. All Chinese products made by illegally exploiting American patents will incur a 25% import duty. The ﬁnal list has not yet been published, but there’s no doubt that it means to aﬀect the ten strategic areas that Xi Jinping has included in his Made in China 2025 development plan, the one that is supposed to transform the Chinese People’s Republic into a technologically advanced powerhouse. Robotics, electric vehicles, artiﬁcial intelligence, IT, industrial automation, biotechnologies, renewable energies, naval and aerospace engineering and the digital economy are certainly a few of the production sectors that will be aﬀected by the tariﬀs with estimated losses of around $60 billion. China initially responded by selling oﬀ US Treasury bonds, of which they are the biggest holders, and then identiﬁed 120 American products and weighed them down with 15% tariﬀs, including fruit, wine and steel piping. Finally, it applied 25% tariﬀs on another eight products which Beijing currently imports from the US, including pork and recycled aluminium. The Chinese have estimated the damage to the US at around $3 billion. Beyond the numbers -- which would seem to point to a zero-sum trade war, therefore totally useless if not damaging to the American interests Trump meant to protect -- the impression one actually gets is that the US, in addition to dilapidating its share of a number of markets, is also losing international credibility and reliability, without which it is almost impossible to claim a role as an undisputed superpower that can police crisis situations, especially where values are concerned, with the recent blitz in Syria providing a case in point. On this occasion, though hardly a huge surprise, the international community’s ﬁrst reaction was to doubt the fact that a chemical attack against civilian targets had actually taken place, thus raising the question of whether Trump’s America can still be trusted. Little point asking why this might be the case.